Certain Fallacies About the "Prosperity of India" Examined

CHAPTER XIII

CERTAIN FALLACIES ABOUT THE “PROSPERITY OF INDIA” EXAMINED

THERE are certain outstanding fallacies about the “prosperity of India,” which form the stock in trade of British imperialists in all discussions relating to India. We will examine them briefly.

(a) The first and foremost of them is the argument that is based on the absorption of precious metals by India during the last seventy years. In a paper bearing the date August, 1911, in the collection of the East India Association papers, it is said that within the seventy years preceding, India absorbed gold of the value of £240,000,000, out of which no less than £82,000,000 worth was imported in the first decade of the twentieth century, leaving a balance of £158,000,000 for the preceding sixty years.

Taking the figures from the statistical abstracts of 1901–02 to 1910–11, the total of net imports of gold comes to a little over £75,000,000 only.

The writer of the East India paper also gives the figures of silver imports. He says that within the seventy years India absorbed 2,250,000,000 ounces of silver, out of which 720,000,000 ounces were imported in the decade immediately preceding, valuing it at £88,000,000.

To the quantity of gold thus imported he adds another £35,000,000 as likely to have been in India in 1840 and this brings the grand total to £275,000,000 for the total stock of gold in India in 1911. Similarly he values the total stock of silver in India, at the end of 1910, as worth £250,000,000. On the basis of these figures he remarks, “with such figures before them, how can people say that India is being drained of her material wealth?”

Mr. Digby’s masterly reply to this argument is contained in Chapter V of his monumental work. We can only notice the argument very briefly.

First as regards the total value of gold and silver imported into India, Mr. Digby’s figures for the sixty-five years from 1835 to 1900 come to £377,853,857. From this figure Mr. Digby deducts the following:

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as also £65,000,000 on account of wastage in the trinkets and ornaments of the population at the rate of one penny per head per annum. This account gives a balance of £221,949,902 to the credit of the people of India in sixty-five years. Dividing the balance on the average population of 180,000,000 during the period, Mr. Digby concludes that in the sixty-five years concerned, the treasure imported into India would amount to £1 4s. 1¼d. per head or to 4¼d. per head per annum.

Taking the figures of the writer of the East India paper, the total value of the imports of gold and silver into India in ten years from 1900 to 1910 would be £170,000,000 or say an average of £70,000,000 per annum. Divided on 315,000,000 it results in about 4s. 5d. per head per annum (110 cents). This average is struck without making any deductions for coinage, for government reserves and for “the hoards” of the feudatory States.

In the statement of moral and material progress of India for 1911-12 “the total importation of gold sovereigns for the decade” is given as £57,000,000, out of which about £18,000,000 were imported in 1911-12 alone. Of this, nine millions were held in government treasuries, and forty-eight millions were either in circulation or held by the people.

The total net addition to the silver currency during the decade was about sixty-eight crores of rupees valued at £45,300,000. This sum includes only rupees and half rupees.

On March 31, 1912, the Government reserve consisted of

Gold . . . . . . . . . . . . . . . . . . . £21,259,400 Silver Coin . . . . . . . . . . . . . . £10,328,100 Bullion . . . . . . . . . . . . . . . . . £ 52,500

It would be thus seen that after proper deductions the net treasure really absorbed by the people and princes of India considerably dwindles.

At this stage it would be well to remember that the native States of India take a great deal of precious metals in return for the goods which they supply.

Their import of merchandise per head is considerably less than in British India and they get the price of their exports mostly in bullion.

The fact is that when making pleas like this the British Imperialists forget the huge population with which they are dealing and fail to make the necessary deductions. Besides, they ignore that India is a heavy borrower. Debts raised in England must be sent to India in the shape of gold and silver.

No one contends that there are no rich people in India. Some of the rulers of the native States may have amassed big treasures. Besides, the Government contractor, the banker, the lawyer and the stock exchange dealer have all made some money. In every country, however poor generally, there must be a certain section of the population who are rich. Their existence, though, does not prove that the people are prosperous. The fact remains that in spite of these imports of gold and silver the average income of an Indian has been officially estimated to be not more than $10 a year¹ and the average wealth per capita in India is £11. We have given the comparative tables in another chapter.

(b) The trade figures are also cited as proof of India’s prosperity. We have already shown who profits by this trade. If we divide the total foreign trade on 315 millions of Indians it comes to much less than £1 per head.

(c) The same may be said about the figures relating to railways. See the chapter on railways.

As to the poverty of the masses and the general lack of money in India, we may in conclusion quote from an article by Sir D. Hamilton in the July, 1916, number of the Calcutta Review.

Says Sir D. Hamilton:

‐‐ We have given India peace; but we have not given her power — the power to rise in the human scale. India is four‐fifths of the Empire but has not one‐fifth of her strength . . . Weak in education, weak in medicine, weak in sanitation, weak in political power, and weak in all that is due to weakness in finance more than anything else.‑‑

Again:

‐‐ Money is power, and modern money is Credit, of which India has little or none; and a people without Credit are a people without a present or a future.‑‑

‐‐ How is it,‑‑ asks he, ‐‐ that in the year of our Lord 1916, after a hundred years of British rule and under a Government the most humane in the world, India is so bare of Credit and Cash.‑‑ His answer is: ‐‐ Mainly because the Government has overlooked the first principles of political economy. . . . The first object of its political economy has been to square its own budget rather than to enable the people to square theirs. It has enabled the people to provide a plentiful revenue not for themselves but for others.‑‑

‐‐ The national purse is empty for peace as for war and will remain empty until the purses of the people are first filled in accordance with the first principles of political economy.‑‑

‐‐ Russia understands this.‑‑

Sir D. Hamilton then makes some quotations from a recent speech of the Russian Finance Minister and finally winds up this part of his paper by remarking, " While Russia plans and prospers, is India ’ to wait and see ’ ? "

In another part of the same paper he observes, " Financially the people stand where they did at the commencement of British rule. "

The Indian Nationalists, however, think that the people are financially worse off than they were at the commencement of British rule.

How the recent " gift " of $500,000,000 by the Government of India to the Imperial Government will affect the financial resources of India remains to be seen.

Footnotes